Buying a football club is not a standard M&A play. You are stepping into a regulated ecosystem with volatile revenues, unique sporting liabilities, and reputational risk that moves at the speed of social media. Solid financial diligence is necessary, but it is not sufficient. Real protection comes from integrating regulatory, sporting, stadium, and integrity checks into one coherent workstream, months before heads of terms. This insight sets out a hits and tips that could be used cross-border investors so that the first season after closing is spent winning games, not firefighting.
Introduction
Football club purchases are accelerating across Europe and the US, yet the rules are tightening. In England, the Premier League’s Profitability and Sustainability Rules and the updated Owners’ and Directors’ Test have teeth. UEFA’s Financial Sustainability regime caps how much of club income can be spent on the squad. UK national security screening and EU FDI screening can also bite, depending on structure. If due diligence stops at EBITDA and stadium yield, you miss the risks that actually derail value: undisclosed sell-ons, safety certificates, image-rights tax traps, agent disputes, and compliance failures that invite points deductions.
1. Rulebook first: model the deal against football’s gatekeepers
Financial modelling should sit on top of a regulatory model. Before you price the asset, map your structure and plans against the rules that can block or punish your ownership.
- a) Owners’ and Directors’ Test and probity
The Premier League expanded its OADT to include new disqualifying events such as UK sanctions exposure, specified criminal offences, and certain regulatory sanctions. Chief executives and “relevant signatories” now fall within scope and the league conducts takeover due diligence against a defined pack of “Acquisition Materials”. Build these checks into your VDD and lock in a clean chain of ownership.
- b) Financial sustainability limits
Two levels matter:
- Premier League PSR. Clubs are assessed over a rolling three-year period, with sanctions that include points deductions. Buyers must walk the club’s past and forecasted losses through the PSR tests as part of the pricing conversation. The current handbook sets out Profitability and Sustainability, Associated Party Transactions and Fair Market Value tests that will affect your post-close spend and sponsorship strategy.
- UEFA Financial Sustainability Regulations. If European competitions are part of your investment thesis, the squad-cost ratio caps spending on player and coach wages, transfers and agent fees as a percentage of football earnings. This limit phases to 70%. Your five-year cash plan should be reconciled to that cap.
2. Sporting liabilities: the hidden balance sheet you must audit
Your P&L will be driven by the football decisions you inherit. Traditional quality of earnings does not catch these items.
a) Transfer ecosystem liabilities
- Deferred transfer fees and contingent add-ons. Reconcile the club’s transfer obligations against FIFA TMS and underlying contracts.
- Sell-on and matching rights on outgoing players. These can reshape exit values.
- Solidarity payments and training compensation. Up to 5% of transfer compensation can flow to training clubs on international moves, separate from training compensation obligations. Price this into your model and ensure the club has processes to track and pay these amounts.
b) Player and coach contracts
- Image-rights structures. Mis-structured arrangements carry UK tax risk and can generate legacy disputes.
- Termination clauses and performance triggers. Clauses on relegation, European qualification, or minimum minutes can swing millions.
- Agent fee accruals and disputes. Review open DRC or CAS matters.
3. Stadium, safety and property: your licence to operate, not just an asset
The stadium is a business within the business. Title and cashflows matter, but safety certification and operational permissions are your licence to admit fans.
a) Safety certification essentials
In England and Wales, designated sports grounds require a safety certificate issued by the local authority under the Safety of Sports Grounds Act 1975. Certificates set capacity and detailed conditions. Compliance is guided by the Green Guide from the Sports Grounds Safety Authority. If you plan capacity changes, safe-standing, or major refurb, certification and local authority buy-in drive your timeline.
b) Property and planning
- Confirm freehold vs leasehold, break rights, rent review mechanics, and any restrictive covenants on non-football use.
- Check planning permissions and s106 obligations for future development.
- Map out CapEx and lifecycle costs for turnstiles, seating, broadcast infrastructure, and sustainability upgrades.
- c) Operations and matchday risk
- Review Safety Advisory Group minutes, stewarding contracts, policing costs, and insurance.
- Benchmark ground regulations and emergency procedures against the Green Guide and local certificate conditions.
4. Governance and integrity: de-risk people, payments and partners
Football clubs are public-facing brands. Integrity failures turn into sporting penalties, sponsor exits and political pressure. Treat compliance as an asset that preserves points and enterprise value.
a) Anti-bribery and corruption across borders
In the UK, the Bribery Act 2010 includes a strict corporate offence of failure to prevent bribery, with a defence only if adequate procedures existed. The Ministry of Justice guidance sets six principles that your club-group must embed.
b) Sanctions, sponsorship and reputational screens
- The Premier League’s OADT now treats government sanctions and defined human-rights breaches as disqualifying. Your owners, senior execs and key sponsors must clear enhanced screening.
- Review gambling and high-risk sector sponsorships against league codes and impending regulatory changes to avoid forced unwinds and inventory gaps.
- c) Practical controls to implement pre-close
- Third-party risk map for agents, intermediaries, scouts and overseas academies.
- Gifts and hospitality register calibrated for matchday realities.
- Payment controls for agent fees and transfer instalments, with dual-authorisation and legal sign-off.
5. Cross-border structuring: clear the state, competition and banking hurdles
Many football deals involve offshore holding vehicles, US or Middle Eastern investors, or EU assets in the group. The regulatory touchpoints are not theoretical.
a) UK investment screening and EU FDI rules
- The UK National Security and Investment Act can catch transactions with UK nexus, even where the target is not obviously sensitive. Filing strategy and timelines should be confirmed early in the deal calendar.
- The EU FDI Screening Regulation creates a cooperation mechanism among Member States and the Commission for reviewing non-EU investments. Even where no mandatory filing exists at the EU level, Member State regimes may require notification. Cross-holdings in EU clubs, academies or media assets can trigger this.
b) Merger control and competition law
- UK CMA jurisdiction can arise on the turnover or share-of-supply test. Media rights, ticketing, or venue operations may be the relevant market, not “football” in the abstract. Early informal engagement avoids surprises on timetable.
c) Banking, AML and source of funds
- Expect enhanced bank diligence on funding flows, especially where capital is routed through multiple jurisdictions. Build a clean source-of-funds dossier and sanctions analysis for owners and major sponsors.
If you are exploring a club investment, Linkilaw’s cross-border sports team can run a rapid regulatory and sporting diligence sprint to de-risk your deal and protect season one. Get in touch for a confidential roadmap tailored to your structure and timeline.
